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Software: Secure opportunities - Views on News from Equitymaster
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  • Sep 13, 2002

    Software: Secure opportunities

    Information technology (IT) has changed the way organisations do business. It has opened new avenues for companies, which they thought, never existed. The large-scale acceptance of Internet by all industries be it manufacturing or services is a proof of its popularity. While at one end Internet has made life easier for businesses, at other end, by the virtue of it being a public network, the Internet has made IT systems vulnerable to misuse.

    Unauthorized accesses of an organisationís systems and virus attacks are some of the pangs being faced by organisations that widely use Internet. Considering, the economic value and mission criticality of information in an increasingly networked world the need for IT security is at the top of every organisations IT shopping list. Therefore, inspite of the downturn in the technology sector, information security is perhaps one of the very few areas that have shown tremendous growth.

    IDC, a market research firm, has forecast that the global market for information security services will reach US$ 21 bn (Rs 1,020 bn) by the end of 2005, up from US$ 7 bn (Rs 340 bn) last year. This growth will be driven by the increasing use of remote local area networks (LAN), Internet, extranet/intranet, and wireless access services by corporate customers. Firms in the financial services sector, where confidentiality and integrity information is extremely important are likely to lead the spending in this area. Further, information security has received a renewed focus after September 11 attacks on the US. There are now fears that unable to strike physical targets terrorist might resort to cyber attack to hurt business being done through the Internet. Thus, cyber attacks and business continuity plans are being looked upon as serious matters.

    A number of Indian software companies have cashed in on the demand for security solutions. While some companies are present in both product as well as product installation and maintenance space, most are limited to the latter. Those into implementation provide services on behalf of companies like IBM, Cisco, HP and Novell. There are exceptions like Wipro, which has product of its own. WiproWebsecure is a component based security framework. The product is an identity and permission infrastructure solution that provides a single security umbrella enforcing a centralized security policy across the organization. (Read more) Wipro also has a tie up with Symantec Corporation, world leader in Internet security technology to jointly market the Symantec range of products and solutions in India.

    The success story of Wiproís security product can be gauged by the fact that the product is being increasingly accepted by several large multinationals. Bangalore-based PSI Data Systems is involved in developing back-end security software for capitals market is another such example. There are considerable barriers, however, to the entry of new players in the market due the requirement of high technical expertise. Another major impediment is the fact that companies are likely to rely on products offered by established players.

    Certain multi-national corporations such as Novell have shifted development of prime security products like Border Manager to India. IBM, Cisco and HP are other multinationals doing development work from India. Other players in the network security market in India are Ramco, Infosys, Sify and HCL Comnet.

    Indian companies that develop world-class software and security products conforming to recognized global standards would do well if they are able to tap this market which has exhibited immense potential in spite of an general downtrend in the IT market. Case in point: a number of Israeli companies like Checkpoint have already gained a foothold in the area of commercial systems security, acquiring global patents for their products. They are poised to reap the benefits of globalisation of security systems around the world. With the best brains working on R&D, vision and insight even domestic software companies can reap these benefits.



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